Mari Petroleum announces 800% bonus shares

Mari Petroleum Company Limited (Mari) announced a net profit of PKR 77.29 billion for the year ended June 30, accompanied by a dividend of PKR 134 per share and an unexpected 800% bonus issue (8 new shares for every share held).

Mari’s earning per share for the year stood at PKR 579.36, which is 38% higher than the EPS of PKR 420.75 in FY23.

Companies issue bonus shares to make their stock more attractive for retail investors, provide an alternative to a cash dividend, and/or reflect their financial health position. The total number of shares increases, which typically leads to a proportional decrease in the share price.

For example, if a company issues a 1:1 bonus share, the number of shares doubles, and the share price is halved. However, the wealth of shareholders remains the same. Mari’s share is trading at PKR 3,144, and if price is reduced proportionately, Mari’s share will be PKR 393.

Mari previously issued 10% bonus shares for FY19 coupled with a dividend of PKR 4 per share.

Sales in FY24 increased 25% to PKR 181.83 billion compared to PKR 145.77bn in FY23 amid 9% and 12% yearly jump in gas and oil production, respectively. Wellhead price of Mari Gas Field also increased 19% YoY.

During FY24, the company made discoveries at Shawal-1, Shewa-2, Maiwand X-1, and Jhim East X-1.

Furthermore, MARI has increased its exploration acreage by acquiring working interests in Nareli (27.55%), Zarghun South (40%), and Kalchas South (44%) blocks.

MARI’s subsidiary Mari Mining Co.Private Ltd was awarded two mineral exploration licenses in Chaghi district of Balochistan.

The board of directors of Mari Petroleum has also approved formation of a subsidiary with focus on cloud computing and artificial intelligence.